L2 Digital IQ: China

L2 Digital IQ: China

We just released our China Report at L2 Think Tank and it is by far my favorite L2 report to date.  As the largest and most robust study of its kind, this research brings to light the importance of China as an emerging market.

Although much of the study is focused on ranking the digital competence of 100 prestige brands into five categories based on more than 100 quantitative and qualitative data points, there is also “The Ten Commandments of Commerce in China” from the Dean of George Washington’s Business School and other crucial takeaways.  

Perhaps most important, the results speak to a much bigger story of international significance.
Below you will find some data points parsed from the study and particular reasons why establishing a digital presence in China is so important for brands of the future:
  • China has 384 mm people on the internet, more than the US and Japan combined.  

    • In 3 years that number explodes to 840 mm, more than the US, Japan and Europe combined.  (Mature markets will only experience modest growth.)
  • In China, 80% of luxury consumers are under the age of 40.

    • 30% are under age 40 in the US and Japan’s market under 40 is 18%
  • Similar to the path telephony took in India (skipping landline), commerce in luxury may skip traditional theater retail in tier one cities and meet consumers’ appetites online.
  • A growing market coupled with a more digitally native (i.e., younger) consumer translates to a revenue line whose growth will eclipse any other growth market for prestige.  In sum, online commerce in China represent the greatest opportunity in a generation for luxury brands.  However, many are missing the boat.  While 80% of brands surveyed offer a Chinese language site, only 10% are selling online.  We (L2) work w/some of these e-commerce enabled brands, and they are enjoying quadruple digit (yoy) revenue growth in China.  
Feel free to download the PDF directly from this link.  We at L2 would love to hear what you think.



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